TY - JOUR
T1 - Myth or reality? Assessing the moderating role of CEO compensation on the momentum of innovation in R&D
AU - Tien, Chengli
AU - Chen, Chien Nan
PY - 2012/7
Y1 - 2012/7
N2 - This study researches the influences of CEO compensation on firm behavior to examine the interactive relationship between the behavioral momentum of innovation in R&D and CEO compensation. The models presented in this study are based on evolutionary, institutional, and agency theories to test hypotheses using data from 107 companies in the high-technology sectors in the United States. The results indicate that the pre-succession innovative behavior of these high-technology firms on R&D can positively affect these firms' post-succession innovative behavior towards R&D. That is, positive momentum in R&D innovation prevails in a firm across a change of the CEO. However, for the role of CEO compensation, short- and long-term compensation does not positively moderate this behavioral momentum in R&D. Hence, the moderating impact of short- and long-term CEO compensation to enhance the momentum of innovation in R&D can be romanticized. These findings provide boards of directors with evidence as to how a CEO succession matters to a firm's behavioral momentum in R&D, and whether CEO compensation can be strategized to change a firm's innovation and momentous behavior.
AB - This study researches the influences of CEO compensation on firm behavior to examine the interactive relationship between the behavioral momentum of innovation in R&D and CEO compensation. The models presented in this study are based on evolutionary, institutional, and agency theories to test hypotheses using data from 107 companies in the high-technology sectors in the United States. The results indicate that the pre-succession innovative behavior of these high-technology firms on R&D can positively affect these firms' post-succession innovative behavior towards R&D. That is, positive momentum in R&D innovation prevails in a firm across a change of the CEO. However, for the role of CEO compensation, short- and long-term compensation does not positively moderate this behavioral momentum in R&D. Hence, the moderating impact of short- and long-term CEO compensation to enhance the momentum of innovation in R&D can be romanticized. These findings provide boards of directors with evidence as to how a CEO succession matters to a firm's behavioral momentum in R&D, and whether CEO compensation can be strategized to change a firm's innovation and momentous behavior.
KW - CEO compensation
KW - agency theory
KW - evolutionary theory
KW - innovation
KW - institutional theory
KW - momentum
UR - http://www.scopus.com/inward/record.url?scp=84860821607&partnerID=8YFLogxK
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U2 - 10.1080/09585192.2011.637059
DO - 10.1080/09585192.2011.637059
M3 - Article
AN - SCOPUS:84860821607
SN - 0958-5192
VL - 23
SP - 2763
EP - 2784
JO - International Journal of Human Resource Management
JF - International Journal of Human Resource Management
IS - 13
ER -